Source: Sharecast
However, his speech did not include any major new policy announcements, while tax hikes were not as steep as feared.
The chancellor - who was appointed in the summer by prime minister Andy Burnham - told a packed House of Commons that his Budget was "built on fiscal discipline" but that it would also provide "breathing space" for both the cost of living and doing business.
"Analysts like to speak of economic headwinds. But what we face today is global economic storms," he said.
Acknowledging that inflation had spiked in the months since the US first attacked Iran, Healey said the government would now spend £14bn more on debt interest this year.
He also noted that Britain was, despite the global macroeconomic backdrop, "defying expectations", with some of the highest growth in the G7. The Office for Budget Responsibility now expects GDP to grow by 1.2% this year, up modestly from its March forecast for growth of 1.1%. But the OBR was more downbeat for 2027, forecasting growth of just 1%, well below its previous forecast for 1.6%.
Public sector net borrowing was expected to fall, with the OBR estimating it would decline from 4.2% of GDP in the current financial year to 3.4% in 2027-28. The OBR had previously forecast borrowing of 3.6% in 2026-27, falling to 2.9% in the next year.
Measures announced to ease the cost of living including removing the gas standing charge from next year, with similar reforms expected for electricity bills; extending the 5p fuel duty cut to July; and a one-off £100 energy payment for around 20m households in council tax banks A to D.
To help pay for those measures, banks will pay an extra 3% surcharge tax on UK profits above £100m for 15 months from January, taking the total surcharge to 6%. However, that was not as steep a rise as feared, and bank stocks continued to push higher, led by NatWest Group, up 4% at 659.1p, and Lloyds Banking Group, which added 4% to 105.83p.
Healey said: "Our world-leading banks make a huge contribution to this country, in the tax they pay and the jobs and industry they support.
"Amid the global economic storms I am looking to our banks to help give ordinary people breathing space."
Gambling taxes rose, but also were not as steep as feared by some. Healey said that the machine games duty - the tax levied on slots - would rise to 25% from 20%, to help fund rates relief for small businesses. Shares in Rank Group soared 8% to 85.4p, while Ladbrokes-owner Entain spiked 6% to 480.65p.
Healey announced a 2 percentage point increase for taxes on income from property and savings from next April.
On the UK’s soaring welfare bill, Healey pledged to bring down spending "in a Labour way" and reiterated previously announced plans to reform the pension triple lock. But he declined to detail any new announcements until Alan Milburn and Stephen Timms published their reviews later this year.
Neil Wilson, UK investor strategist at Saxo Markets, said the Budget “largely set out what was required and expected of it – not to rock the board. It seems clear that a do-nothing Budget means we are on course for an early election in 2027. Fiscal headroom was at the low end of tolerance for markets at £15bn, but gilts shrugged. Healey will be happy so far.”
Kathleen Brooks, research director at XTB, said: “The bond market’s verdict is a decent B+. The Budget focused on growth, rather than benefits, but unsurprisingly did not cut government spending, instead pushing that out to the government’s spending review that is due later this year.”
Sarah Coles, head of personal finance at AJ Bell, said: “Stepping into Rachel Reeves’ shoes at the despatch box can’t have been too comfortable for Healey, but he employed enough fancy footwork to skirt most of the fiscal mantraps in his path. He also took steps to reinforce that he’s taking a strikingly different route to his predecessor, focusing on easing the pain of the rising cost of living and reversing the disastrous decision to cut the cash ISA allowance.”
Healey paid tribute to Reeves during his speech, noting that she "brought fiscal discipline to this country [and] took the decisions required to boost investment". But he ditched her plans – intended to increase investment in British stocks – to slash the annual cash Isa allowance to £12,000 from £20,000.
Conservative leader Kemi Badenoch said in response that the Budget was “not good enough, not strong enough, not bold enough”.